Fewer Dealers Look to Buy, See Profits Rising While More See Their Value Falling

A survey of over 600 car dealers found that 48% say they plan to purchase at least one dealership over the next 12 months.

The survey, conducted by Kerrigan Advisors, a buy-sell auto retail firm with a sell-side advisory specialty, found that just 2% of dealers plan to sell in the same time frame.

Purchase plans are down significantly from last year’s survey responses, when 77% said they aimed to buy one or more dealerships in the following 12 months. Responses indicating plans to sell were down just one percentage point from last year.

Half of respondents said they plan to neither buy nor sale during the period in question, up significantly from 20% in last year’s survey.

Dealers indicating their dealerships’ value will fall grew from 6% to 20% this year. Twenty percent of respondents said they believe their dealerships’ value will rise.

Most respondents – 75% -- said their profits will likely be flat or increase, though fewer expected an increase – 34% versus 79% last year. That may reflect gradually loosening inventories and the eventual effect on sticker prices.

READ MORE: Positive Outlook for 2022's Buy-Sell Market

Originally posted on Auto Dealer Today